In another attempt to take its investigation forward in the multi-crore coal import scandal, the Directorate of Revenue Intelligence (DRI) filed an affidavit with Bombay High Court on June 13 challenging a petition by Adani Enterprises Ltd (AEL) that sought the quashing of DRI’s letters regotary (LR) to foreign jurisdictions.
DRI told the court that AEL is trying to “impede” its probe against a few Adani Group firms by challenging the “well settled procedure of issuance of letter rogatory” (LR) in the court.
In September last year, the Bombay court admitted the AEL petition and granted interim stay on LRs sent by the DRI to several countries in connection with the probe into allegations of overvaluing of Indonesian coal imports. The stay order came just weeks after a Singapore High Court granted permission to the DRI’s LR and asked Adani group to produce documents related to coal import related transactions in its jurisdiction. Subsequently, in February, the DRI challenged the stay order in the Supreme Court, which had now directed the Bombay court to settle the matter by the end of this month.
A LR is a formal request for judicial assistance from foreign countries under the Mutual Legal Assistance Treaty (MLAT).
The latest affidavit by the DRI stated that the documents with foreign countries have “clinching evidence” on how the Adani group inflated the cost of Indonesian coal imported to India for obtaining higher tariff compensations, that increased the cost of power sold to the public in India.
NewsClick has earlier reported that the DRI was prompted to take up the LR route in its investigations as several state-owned banks including State Bank of India (SBI) and Bank of Baroda (BoB) among other banks had declined to share information of financial transactions lying with their overseas branches of the companies in question, which halted its investigation.
As per several show cause notices (SCN) issued by the DRI pertaining to over-invoicing of imported Indonesian coal, a set of giant companies in the power sector have allegedly resorted to over-invoicing of imports of coal and power generating equipment, cumulatively amounting to more than Rs 50,000 crore.
The DRI alleges that Adani Group imported Indonesian coal at inflated costs by billing through intermediaries in tax havens siphoning thousands of crores, alongside obtained higher tariff compensation from regulatory authorities. For instance, in September 2018, the Appellate Tribunal for Electricity (APTEL) had directed the public sector electricity distribution companies (discoms) in Rajasthan pay Rs 3,591 crore to Adani Group-owned Adani Power Rajasthan Limited (APRL) that owns and operates a 1,320-megawatt capacity thermal power plant in the state in Kawai town of Baran district. Following this, on an appeal by the discoms before the Supreme Court, the apex court modified the amount payable to some Rs 2,500 crore in October 2018.
In 2018, the DRI had sent LRs to foreign countries – Singapore, Dubai and Switzerland – as part of its ongoing investigation into financial fraud by companies and entities in power sector. Reportedly, DRI is probing at least 40 companies, including companies of the Adani Group, two companies of the Anil Dhirubhai Ambani Group (ADAG) and two Essar Group firms, for alleged overvaluation of coal imports from Indonesia between 2011 and 2015.